Trump Budget Mute on Major Healthcare Reform & Drug Pricing
President Trump has shared his fiscal 2021 budget plan with Congress and it has no details on two very key issues from last year’s budget – healthcare reform and prescription drug costs. Although Congress is not obligated to follow the President’s recommendations his budget plan does provide insights into where healthcare falls on his priority list as the 2020 presidential election campaigning heats up.
Last year President Trump’s budget supported a “repeal and replace” approach to the Affordable Care Act (ACA) but this year there is no mention of any sweeping reform of the ACA. However, of note, the Trump administration is still actively pursuing a lawsuit that has the potential to strike down the ACA in its entirety. President Trump’s budget does speak to some general principles for healthcare reform which have been recent talking points at his rallies including:
- Protection for individuals with pre-existing conditions
- Healthcare cost transparency
- Reducing prescription drug costs
- Eliminating “surprise” medical billing
- Reducing regulations.
Last year President Trump and HHS Secretary Azar produced their Blueprint to Reduce Drug Costs with an extensive list of policies to accomplish the reductions. This year President Trump is essentially leaving drug-pricing reform to Congress with an “allowance” of $135 billion for bipartisan policy to lower drug costs.
Overall, President Trump’s budget plan includes significant domestic spending cuts, with HHS getting a 9% reduction. Additional policies of interest include:
- A funding increase of $24 million to improve oversight of the 340B drug discount program. This should be a very clear signal to covered entities to take a serious look at their overall compliance programs.
- Site-neutral payment policies for some physician services administered in hospital outpatient departments. This combined with commercial payer efforts toward lower cost site of services should prompt hospitals to accelerate strategies around infusion services to retain this business.
- Continuation of cuts to Medicaid disproportionate-share hospital (DSH) payments from 2025 – 2030
- Eliminating bad debt for payments to DSH eligible hospitals
- Allowing more frequent Medicaid eligibility checks by the CMS
- Work requirements for food stamps and Medicaid nationwide
- Hospice payment reductions for skilled nursing facilities
As noted, Congress has actual budgetary control but the Republican party has shown a clear penchant to fall in “lock-step” with the President and many of the proposals in the budget if implemented have the potential to negatively impact healthcare coverage and service delivery.